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Small-Business Innovation

By APICS CEO Abe Eshkenazi, CSCP, CPA, CAE | 0 | 0 | June 21, 2013

In the July/August 2013 issue of Fast Company, I stumbled upon a happily-ever-after manufacturing story, the kind of which make supply chain and operations management professionals__and all business people__sleep a little bit easier at night.

The article, “The Road to Resilience: How unscientific innovation saved Marlin Steel,” highlights a Baltimore manufacturer that used to produce wire baskets solely for use in bagel stores. With 18 employees, most of whom made minimum wage, the company handled $800,000 a year in sales of its $12 bagel baskets. Then, factories abroad started selling bagel baskets for $6, and Marlin leaders had no hope of matching that price.

“Marlin saved itself by facing a truth that few threatened manufacturers can stomach: it was failing because it had gotten everything wrong,” writes Charles Fishman. “It had the wrong customers; it had the wrong products; it had the wrong prices. Greenblatt [owner of Marlin Steel since 1998] realized__just in time__that even wire baskets could be innovative.”

In 2003, Greenblatt, who was handling sales, got a call from Boeing. The airplane manufacturer needed custom baskets to hold assembly parts. It needed the baskets to be precise, and it needed them fast. But, Boeing could pay Marlin Steel $24 a basket. That’s when things started to turn around for this small business.

According to Fast Company, the United States has 6 million fewer jobs today than it did in 1998. Yet, US manufacturing is thriving, in large part, because of high worker productivity and efficient machines. “And the United States still has hundreds of thousands of factories,” Fishman writes. “The ones we notice are big … but most are small, like Marlin Steel.”

After the Boeing order, Greenblatt did some research. He discovered that factories of all varieties need wire baskets, and he also discovered that bagel stores are shutting down__not opening up. Marlin Steel had to change its strategies. Greenblatt has invested in staff education and smart machines. Now, company leaders work with customers to give them exactly what they want quickly. Instead of bagel baskets, Marlin Steel delivers engineering and design. In 2012, company sales were more than $5 million, marking the seventh consecutive year of sales increases.

Surviving and thriving

To find success, Marlin Steel transformed itself into an engineer-to-order (ETO) business. According to the APICS Operations Management Body of Knowledge Framework, “in ETO environments, customer specifications require unique engineering design, significant customization, or new purchased materials … ETO environments theoretically are the slowest to fulfill: Time is required not only to build the product, but to custom design it to meet the customer’s unique requirements.”

Greenblatt turned his manufacturing business around and carved out competitive advantage for Marlin Steel by quickly producing ETO baskets. To succeed, he needed more advanced equipment and better-trained workers.

Whether through the APICS Principles of Operations Management courses or its intensive certification programs, APICS training prepares and creates leaders within organizations. As the story of Marlin Steel illustrates, manufacturers big and small need their employees to innovate in order to survive and thrive in today’s complicated economic environment.

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